AOL & Yahoo – A marriage made in Hell

September 9, 2011

There is a serious possibility that AOL and Yahoo could do a deal which would see these two aging Web giants come together. But is one dying Web giant any better than two dying Web giants? I don’t see how.

In the last week, AOL has had a little trouble with TechCrunch and its former editor-in-chief/venture capitalist Michael Arrington. And Yahoo has fired its CEO Carol Bartz after two years of not achieving much of note. But how to solve these issues quickly and easily and in one fell swoop? Why, merge the two companies, of course.

This is the suggestion that AOL boss Tim Armstrong has made to Yahoo, according to sources speaking to Bloomberg. Whether this would be a full-blown merger, an acquisition (by Yahoo of AOL), or an informal collaboration is unclear, but there is at least some discussion taking place, possibly looking at all these possibilities.

In the short-term this could be a good deal, especially for Yahoo. The latter would gain a business which has tried to add new revenue streams and rebuild with the acquisitions of The Huffington Post and TechCrunch to name just two. It would also gain a potential new CEO in the form of current AOL boss Tim Armstrong. The former would become part of a larger whole and stave off the dogs which are circling.

Longterm, however, I cannot for the life of me see what good any such tie-up between the two will do. Both Yahoo and AOL are floundering on the shoreline like beached whales, increasingly unable to compete for business, customers, and advertising dollars against the relative new boys on the block, Google and Facebook.

I doubt any deal will happen. It hasn’t to this point, despite having been threatened on a couple of occasions. And even if it does then it’s surely not going to be enough to save either company from the fate which now looks set in stone.

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